Blockbuster to close 182 more stores

Bankrupt movie rental chain to close as many as 72 outlets before end of year.

December 21, 2010

Bankrupt video rental chain Blockbuster Inc. plans to close 182 stores by the end of the first quarter of next year as it tries to find a way back on its feet.

The largest U.S. video rental chain plans to close 72 stores by Jan. 1 and 110 more in the first quarter of 2011, according to documents filed Friday in Manhattan's bankruptcy court.

It was not immediately known if any of the Lehigh Valley's remaining 12 stores would be affected. Some store employees deferred questions to the company's media relations department. Efforts to get comment were unsuccessful Monday.

Blockbuster filed for bankruptcy in September, weighed down by its debts and stung by video-on-demand and competitors such as mail-order pioneer Netflix Inc. and Redbox Inc., a Coinstar Inc. unit that rents movies through kiosks.

Blockbuster is not alone with its problems in the video rental business. The parent company of Hollywood Video filed for bankruptcy protection earlier this year and closed 760 stores — about a third of its locations — including its three remaining in the region. It was the company's second bankruptcy filing in three years.

Blockbuster has closed about 1,000 stores in recent years as it tries to cut costs, but still had about 2,900 in the United States when it filed for bankruptcy.

In the Lehigh Valley, only one Blockbuster has been closed — the location on Route 248 in Lower Nazareth Township in January. Court files did not identify specific stores in the latest wave of closures. The company is renegotiating leases with thousands of landlords, said Patricia Sullivan, a Blockbuster spokeswoman.

She said the company will emerge from bankruptcy by the beginning of the second quarter of next year, with fewer but more profitable stores.

The company entered bankruptcy with a plan that would put billionaire investor Carl Icahn and his hedge fund partners in control of the company when it emerges.